On the role of I/NGOs in social change and economic development

Let me tell you about this current project.

All right.

These are perspectives on a company. Actually, a family owned business in Pennsylvania. At one time it employed over seventy-five people. Today it employs forty-six. I don’t care about this company or the employees, but I am significantly invested in their major competitor.

Okay.

When founded, the original president made wonderful decisions. In the past five years, the reins passed, and the decisions have been less fortuitous. The chairman is now seeking to sell the company, recognizing the economic climate. They need money to continue; banks aren’t lending money. If he doesn’t sell, the doors will probably close in the next two years. I’m considering a very low-ball offer. The benefit to me is to reduce the competition. If my offer is accepted, the doors will close immediately. According to my accountants, the company in which I’m already invested is projected to increase sales by over 18 percent immediately upon the close of this company. This means I reap benefits. They project my venture in this company will be recouped in profits in less than two years. The long-term benefits are increasingly fiscally rewarding. What do you think the employees of the Pennsylvania Company are hoping will happen?

They either want their company to go on as it is—or to be sold to someone who’ll keep it running.

Good, why?

So they’ll keep their jobs.

The people on the manufacturing floor, custodians, secretaries, and other auxiliary employees played no part in the decisions which now have direct consequences on their lives.

Yes, but they have families, debts, and responsibilities. And I’m sure they’re all worried.

Exactly… What can the people in that plant do to help their situation?

Nothing—it isn’t in their hands.

Correct again…

So are you saying the actions of the people who don’t have control, have no consequence?

No—their actions may have great impact. A lot depends on the goal of the person who has control. Let’s say someone else with capital decides they’re interested in this company. More than likely, they’ll either personally visit, or as I did, send an envoy to investigate the company. If those employees are hardworking, loyal, and if this investor is interested in keeping the doors open, their actions will be an important piece of the equation when decisions are made. Their attitude could actually determine if their company will remain open. On the contrary, if the employees are dissatisfied and disgruntled, investors interested in maintaining the company will shy away. One of the issues which affect these situations is the knowledge of the employees, or the people seemingly out of control. It’s interesting how many people live their lives completely unaware of decisions unfolding around them. Now if they are aware and proactive, they may try to recruit investment on their own. I have controlling interest in a few such companies, funded by Rawlings Industries yet run and invested in by the employees. They now benefit from not only paychecks, but also dividends. It creates a wonderful incentive for hard work and dedication.

So if I decided I was tired of shopping for clothes and wanted to shop for companies, I could go to Pennsylvania, offer them a little more than your low-ball bid, and keep the company going, assuming the employees are hardworking, loyal, and want to keep the doors open.

Well, yes, Mrs. Rawlings, I know you have the capital; however, if you use my bid as a baseline, you’ll end up arrested for insider trading. You can’t make an offer based on the offer of a competitor, unless it has been made public. Mine has not.

How can you make a deal without considering the people and lives it affects?

It’s called business. It’s how we have what we have and will have much more. Closing that business is my concern, the people are not. If my bid is accepted, their presence is no longer needed.

So, there are times when innocent people reap the consequences of others due to no fault of their own.

Yes. It happens all the time.

– exchange between Anthony and Claire, in Consequences by Aleatha Romig

Yes, in the real world as well. My view on this is that (a) business is business is business – “closing that business” has been and continues to be the recipe for the continuous success and relevance of business. Mix up the recipe and the outcome and we’ll all have food difficult to swallow. However, (b) “innocent people” can deal with business by playing the game: make themselves continually relevant, by keeping informed about the market and equipping themselves with the knowledge, attitude, and skills demanded by the market. They need to roll with it.

This is easier said than done, as it happens. Those with resources are able to keep up, if not the capitalists. Those without which this country has a significant share of are the “innocent people”.

Business is not the entity that will right their “innocence”, although, indirectly, compelled by the demand that business be more socially responsible (though the way I see CSR is it’s more of a risk management strategy rather than of business suddenly having a heart), “excess” capital is being directed to fund work in poverty alleviation, implemented by corporate social arms, or channeled to either the public sector or civil society organizations. But how is it that compared to business i.e. capital leading to exponential growth and wealth for players in the market, the “excess” capital has not led to the same exponential wealth for the bottom billion?

There are plenty of literature explaining this, but I’d add, as a theory, this: it’s the lack of organization in terms of how this capital should be used vis-a-vis end-recipient needs and wants. Business has got the equation right already: it doesn’t supply that which isn’t demanded, or a variation, it doesn’t offer a product that it knows won’t pique buyers’ interest, the consequence of discounting this equation well established, and that is, losses and eventually death (if it doesn’t learn quickly). Business is highly-attuned to this consequence.

The business of poverty alleviation on the other hand lacks a common and straight-forward equation. Operation is most often one-sided, focused on the supply side. But what do the end-customers need and want? Compared to business, the community has not been that attuned to it’s consumers nor to the consequence of this practice. Regardless of individual circumstances, tastes, and preferences, it continues to provide “innocent people” products – projects and programs – that it expects to be consumed wholesale, no less. In this, it can learn a thing or two from business: the ability to project, create, and bundle, with just the results of research on small groups, goods and services that appeal to the masses as well as sections of the population.

The community is averse to the term ‘niche’ reasoning that this only applies to the business sector.  When I was starting in the I/NGO sector, with a degree in economics, the first thing I was told was to drop the term and such others from my vocabulary.  I wanted to say WTF but then I thought, I was new and had time to wait and see for myself.  And I saw, time and again, that the community seriously need to understand that it cannot successfully proceed toward social development without understanding it’s link to capitalism (i.e. civil society / social structure as the condition for the rise or development of the middle class).  Understanding that, the community will stop doing everything for people and communities, instead be more of a facilitator.

I remember a meeting I had with a client. We were discussing water and sanitation, the subject of the commissioned study. I asked him if his organization was working with NEDA, or at least with local economic planners. He said they were not and why was I asking that. I said, can I be honest? Off the record? Sure, he said. The way I see it, I said, the lack of toilets among the poor is primarily a strategic one and an economic issue, not of the poor lacking appreciation or awareness of good sanitation as if often cited. If they had regular jobs and income, I said, it’s inevitable that they would want – demand it of themselves or their government – to have better housing and with that, toilets, or better toilets. As one gets richer, I reminded him, one would desire and want things that are better than, or more of, the things one had before or have currently. It’s human nature, I said. At present, they have visceral knowledge of the importance of latrines and sanitation and are only incapable to pay for one or a better one. My point, I concluded, is that your organization could give these people all the toilet and sanitation awareness and appreciation trainings year after year, but if they remain unemployed and there’s no change in their current incomes it’s a futile investment.

Another example, resilience building in the context of rapid economic growth and financial crises.  Instead of imitating what business or government does, I/NGOs can: organize “innocent people” and assist them in setting up mechanisms to process information, retrain them to read the market and meet it’s ever new demands, link them to the market, and provide continuing technical support. With their new-found independence and mobility that comes from having income of their own, “innocent people” no more will themselves avail (demand) goods and services (e.g. health care, better housing, water supply) they need or want. Of course, the support I’m referring to here is that targeting the so-called bottom billion who are not in emergency situations (in that case, they’d need immediate care and assistance – where the current way of doing things has actual impact).  With institutions, for instance schools, it can:  support student organizations and along with school administrators and personnel train them in skills that would help them access funding on their own (e.g. reading the donors’ market, techniques in brainstorming for ideas, identifying ideas that sell, proposal development and writing), link them to other donors and organizations, local and international, and support them in building up their project management portfolios.

In other words, facilitate and build competent social organizations (the foundation of a strong civil society and a critical element in economic (and political) development).  Business and government do not do that.  It simply is not in their best interest.

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